7/30/2010 @ 2:00PM

Animal Magnetism

There are two things that get right up Jan Cameron’s nose. One is spendthrifts. The other is cruelty to animals. As one of Australia’s richest self-made women and the owner of the country’s biggest discount retail group, she can do plenty about both issues.

Cameron built her estimated $300 million fortune by founding outdoor-clothing chain Kathmandu and then selling it to private equity groups in 2006. She’s spent the past 18 months coming to grips with her new purchase: the 380-store, $800-million-in-revenue Australian Discount Retail Group, renamed Retail Adventures. She paid receivers $100 million for the debt-laden company in January of last year, at the height of the global financial crisis. Her biggest challenge so far? Converting the staff to her “run on a shoestring” mentality. “I think this is a very basic business,” says Cameron, 58, dressed supercasually in a navy Kathmandu polar fleece jacket, jeans and trainers, with no makeup or jewelry apart from a plain gold wedding band. “We move a whole lot of stock at low prices. I like a lean, no-frills operation.”

That means ditching the company’s fleet of 60 “V-8 gas guzzlers” for Hyundai 130 wagons–and urging managers to carry stock in the wagons, or even in a van, when they visit stores. “They’re resisting it; vans don’t fit their image,” says Cameron, nonchalantly adding that some people have resigned over the issue.

It also means training staff to use the stationery that their own stores stock, rather than buying it from competitors. “That drives me nuts,” says Cameron, who describes her management style as basic common sense. Another bugbear is recent store fit-outs, where some shops squandered $5,000 on furniture in their back office, instead of using the cheap flat-pack chairs and desks from the shop floor. “I can’t describe how ridiculous that is. It’s little, but it’s symptomatic of a culture that’s not in tune with the way the business should be run.”

Cameron also has strong views on animal welfare–and backs them with considerable philanthropic muscle. Since she moved from New Zealand to rural Tasmania in 2006, she’s quietly given away $30 million, mainly to animal agencies. Recently she announced a controversial $5 million fund to pay “rewards” to those who report cruel hen and pig farmers. She’s also passionate about desexing cats and dogs to reduce the euthanasia rate at pet shelters and helping to fund scientific research into the facial tumors that are decimating the Tasmanian devil population. (In March FORBES ASIA named her one of 48 Heroes of Philanthropy in the Asia-Pacific region. In June she was made a Companion of the NZ Order of Merit for her services to philanthropy.)

Indeed, the reclusive Cameron fesses up halfway through the interview that the reason she’s agreed to talk to FORBES ASIA is to get her animal welfare message to an international audience. “I see this as an opportunity to urge people to view animals differently, not just as a commodity.”

Next on her agenda is a return to her old stomping ground: outdoor gear. Weeks before Kathmandu listed on the Australian stock exchange last November Cameron shocked many by announcing plans for a rival chain and attacking the company she founded for prices that she considers too high. Those plans have now morphed into an arrangement with a 20-store chain, Macpac, owned by three former Kathmandu executives, including Cameron’s ex-husband, Bernie Wicht, a Swiss mountaineer who lives in New Zealand. “We’ll roll out more stores, more products, better prices–the usual story,” she says. “I’ve still got an emotional connection with the industry.”

Cameron’s start came when she was an outdoors-loving medical student in her hometown of Melbourne. She began sewing sleeping bags from her flat, then dropped out of med school to launch Alp Sports in Christchurch, New Zealand, where she moved in 1972. In the first of several well-timed plays, she sold the three-store Alp Sports in 1987, just before the stock market crash. Her business partner, John Pawson, moved to Melbourne to set up a new chain, Kathmandu, which expanded to New Zealand in 1991 when the pair bought back Alp Sports from receivers. In 1994, after an acrimonious partnership split, Cameron and her ex-husband bought out Pawson and in 1996 Cameron bought out her ex-husband, leaving her as the sole owner of Kathmandu.

The chain grew to 46 stores in Australia, New Zealand and Britain, generating annual revenue of more than $100 million. Cameron kept strict control, running a vertically integrated operation that designed, manufactured and sold Kathmandu-branded products–fleece jackets, hiking boots, tents and the like–to the masses. When she started, outdoor gear was drab, practical and strictly for serious bushwalkers; now it’s everywhere, in fashionable colors and quick-drying fabrics.

As she’d done in 1987 Cameron timed her exit perfectly. Near the height of the bull market, in 2006, she off-loaded half of Kathmandu to a private equity consortium. “I thought I’d be a passive investor and go along for the ride with the private equity people,” she says. A few months later she sold out completely, after realizing that she and her new partners were never going to get along. “[Private equity firms] are good at making money, but they’ve got no soul. They were ripping the heart out of the company. Their entire focus is on ruthlessly making money.”

What about her own reputation as a tough, aggressive operator? “Sure, I’ve behaved ruthlessly, too, but that’s not been about just making money, it’s been about building the company,” says Cameron, who reaped nearly $200 million from the two-part sale of Kathmandu.

Her new plan was to semiretire to Tasmania, where she had enjoyed hiking as a teenager. She settled into a mudbrick house on the island’s picturesque east coast and bought 100 hens from an industrial farm to roam the grounds. She bought other property–a rundown guesthouse, a wildlife park, a golf course–and set up the Elsie Cameron Foundation, named after her mother. “Basically I’m aiming to give away all of my earnings each year to charity,” she says, adding that the annual sum is “well into the millions.”

Cameron also had a few small giftware and homeware retail developments on the boil–My Place It’s Home, Dog’s Breakfast and New Objects Of Desire–but she got restless. “I needed a new challenge. I can’t explain the excitement of being in business, of seeing opportunities and turning them into something tangible. It’s exciting, it’s relentless.” She started sniffing around for “something nice and manageable,” perhaps a 50-store retailer on Australia’s east coast that was having a rough time.

What she ended up with was a hodgepodge of discount chains, cobbled together over the years and eventually owned by a private equity consortium under the Australian Discount umbrella. There was Tasmania’s Chickenfeed, as well as Sam’s Warehouse, Go Lo and Crazy Clark’s on the mainland. “My ambitions sucked me in,” says Cameron, a keen bargain-hunter who already shopped at Chickenfeed and loved its low-cost model. “I could see the potential of the company, with an incredible network of stores and turnover of $800 million, but they were not making money out of it.”

She’s now added her homeware/giftware stores to the mix and renamed the whole group Retail Adventures, which is headquartered in Sydney. Although strategies are still being fine-tuned, it seems that the spearhead brand will be Cameron’s beloved Chickenfeed (as in “inexpensive”). Already it’s spread to Victoria, and Cameron plans to take it to 300 stores around Australia, mainly by converting Go Lo stores. For the year ended June 30 the company trimmed its losses of the previous year, and this fiscal year it expects to be in the black.

Retail and consumer expert Ross Honeywill, chief executive of Social Intelligence Lab, says Cameron’s model of low-cost, no-frills, high-volume retailing is attractive to the 8 million Australians he labels “traditionals.” “They love a deal, love discounts, special offers and promotions,” he says. “Entrepreneurs have to decide which side of the river they’re on–low-cost no-frills or high-quality premium prices. The retailers who don’t do well are in the middle, where you just drown.”

There’s no doubting Cameron’s retailing savvy, but she admits that Retail Adventures is proving quite a challenge. For most of last year the company was run by Executive Chairman Robert Atkins, but by November Cameron had sacked him (he died of pancreatic cancer in January). His successor, David Young, was appointed only at the end of June. “I don’t really have the experience to run this size company,” says Cameron, adding that staff motivation has been poor and the culture needs rebuilding after the trauma of receivership. “I have almost bitten off more than I can chew,” she says. “But I’ve got good teeth and strong jaws.”